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Across the Editor’s Desk: Land market on fire

LOREN KRUSE 03/20/2012 @ 10:58am Editor-in-Chief Successful Farming

Sizzling heat in the land rental market this winter was almost enough to warm up soils in the northern Corn Belt for planting in January. The emergence of a few public cash rent auctions made the winning auction bids transparent to farmers everywhere.

With land values leaping in recent years, fed by record grain prices, nobody is surprised that cash rents would follow. But the leap in rents to $400 to over $500 per acre for good corn and soybean land left many landowners and operators stunned. For much more on the changes and turmoil in the land rental market see “Looking After Rented Land” on page 12 and “Land Rental Ethics” on page 26.

News of escalating cash rents makes landowners wonder if their rental agreements are keeping up with fair market rates. And farm operators wonder if they can really afford the risk and tight margins of higher rents that similar farms are able to attract.

As usual, farmer opinions vary considerably as I listened in on the discussion on Agriculture.com, the website of Successful Farming magazine. “You will hear complaints about land rents next year as you have in the past,” says kraft-t in a post. “But the results of those recent auctions indicated that the complaints have been unfounded. Those greedy landlords were not overcharging but gave up income potential to the benefit of their tenants. Where are the ‘greedy’ remarks now that we find out that rents have been underpriced?”

Adds Mike M, “I think what has just happened is that those higher cash rent rates have just gone more public. Negotiations have gone from the kitchen table over a cup of coffee to an auditorium in front of your neighbors. Not sure in the long run that is good.”

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land rents to look out for david s hovda 03/26/2012 @ 12:15pm This land rental market is not all that you read in the paper or magazines. I had a renter for 9 years that took my 6.8 organic matter soils conditioned with the manure from my livestock enterprise and all the alfalfa and crop residue and bled it to a 1.9 in less than 9 years. you know what that will cost me to bring that up to a 6.8 again at todays fertilizer prices. these sugar beets will destroy your lands productive soils. and it will put nothing back. get a good land management team and they will police your renters to put back what they take out , in fertility of the land PERIOD. !!! Gene Johnstones article on the cattle delema. Cattle and beef prices have gotten too high for the average consumer of 2012. If the average teacher was making $ 140,000 yes he could afford beef on his table and $4.00 gas for his bomb. but he is making just 35 to 4o thousand and cannot afford the price of ten dollar beefsteak. I recall back in the early 80s, I had a dear friend from norway who was a doctor from bergen on a heart convention. I took him out to eat at a local restraaunt in Maynard . he ordered a 10 ounze top serloin corn fed beef steak ,potatoe ,salad the whole works ; the bill came to $6.85 cents american money. He said you americans have gone to heaven over hear. Now I think they have gone to heaven and we have gone to purgatory. And Gene you forget the Hilary Clinton dairy bonanza days of 1980 dairy buyout program that dropped the cattle market limit down for 12 days in a row , insider political propaganda and BS.locked limit down for a $200.00 dollar a head loss ., at the %17.5 intrest days of the 80s . We are still paying off those bank loans with after tax income . the IRS will not let you deduct farming loses of more than three thousand dollars a year of the 80s. Every family farmer cattle feeder went broke and never returned. Happy retirnment. succor.

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